India services PMI hits 4‑month high at 55.8

India’s services sector expanded at its quickest pace in four months in October, with the HSBC India Services Purchasing Managers’ Index rising to 55.8 from 55.2 in September. A reading above 50 indicates growth, and the latest figure points to a solid expansion in business activity across the dominant services economy.

The October performance marked a four‑month high for the services PMI as business conditions improved. Survey responses were collected between October 9 and 28, 2026, capturing activity across 400 service providers.

Growth in new business, a key gauge of demand, accelerated to its fastest rate since June, underpinned mainly by strong domestic orders. Service providers cited new client wins and successful advertising campaigns as important contributors to higher sales.

Within the services economy, Finance and Insurance led the expansion in both new business and output, while Real Estate and Business Services saw the slowest growth among the four tracked segments. Companies were able to reduce backlogs of unfinished work for the third time in four months, reflecting the ability to process incoming orders.

International demand lagged behind domestic demand. New export business grew only marginally and recorded its weakest expansion since February 2023.

Employment growth in the services sector slowed markedly, with job creation easing to a fractional rate and described as almost stalled. Hiring matched the slow pace seen in June, the weakest trend in ten months, even as overall activity and new business improved.

Inflationary pressures moderated in October. Prices charged to customers rose at their slowest rate in four months, while input cost inflation eased to its lowest level in over six years. Firms still reported higher electricity, labour, raw materials and transportation costs, but the overall rate of increase softened.

Respondents remained confident that output would rise over the coming 12 months, though business confidence slipped from September and stayed below its long‑run average, signalling cautious optimism about growth prospects in the services sector.

Across the wider economy, the HSBC India Composite PMI Output Index, which combines manufacturing and services data, rose to 56.2 in October from 55.9 in September. This marked the fastest increase in aggregate output in four months and the highest composite reading over that period.

While manufacturing PMI data indicated a moderation in factory activity, output and new orders in that sector continued to expand, and employment recorded a second consecutive monthly increase. Taken together, the PMI readings point to a broad‑based expansion led by services, supported by resilient domestic demand and easing cost pressures.